Office for National Statistics (ONS) reports increase in jobless rate, with claimant count change higher than anticipated, impacting GBP/USD trading

The Office for National Statistics (ONS) reported on Tuesday that the United Kingdom’s (UK) ILO Unemployment Rate increased to 3.9% in the three months leading up to January, surpassing the 3.8% rate recorded in December. Market analysts had anticipated a 3.8% rate for the same period.

Accompanying this rise in unemployment, the number of individuals claiming jobless benefits in the UK surged by 16.8K in February, compared to a gain of 3.1K in January. This figure exceeded market expectations of a 20.3K increase during the reporting period.

Further analysis of the report revealed that British Employment Change data for January showed a decline of 21K, in contrast to the 72K increase reported in December.

Additionally, Average Earnings excluding Bonus in the UK increased by 6.1% year-on-year in January, slightly lower than December’s 6.2% rise and missing market expectations.

Another indicator of wage inflation, Average Earnings including Bonus, rose by 5.6% during the reporting period, down from December’s 5.8% increase and below the expected 5.7% growth.

Commenting on the report, UK Secretary of State for Work and Pensions, Mel Stride MP, stated, “Our plan for the economy is working. Employment is up on the year, the number of people on payrolls is at a record high, and inactivity is falling.”

Stride emphasized, “But our work is not done. Our Back to Work Plan will help a million people to find, stay and succeed in employment. With the next generation of welfare reforms, we’re reducing the number of people on the highest tier of incapacity benefits by 371,000 – people who will now receive support back into work.”

He added, “And with the tax cuts announced in last week’s Budget we will boost the labour force by the equivalent of 200,000 workers, while putting £900 back into the pockets of 27 million hardworking people.”

In response to the mixed employment data, the GBP/USD pair dropped to test the 1.2800 level. Presently, the pair is trading 0.05% lower on the day at 1.2805.